IndoSpace’s first three development funds had a combined 56 million square feet of logistics space
Indian logistics developer IndoSpace has reached a first closing of its fourth development fund on the strength of a $205 million anchor investment from a longtime ally, the Canada Pension Plan Investment Board.
IndoSpace Logistics Parks IV is targeting $600 million in total equity commitments, CPPIB said Monday in a release. The Toronto-based fund manager previously committed $500 million to the 2017-vintage IndoSpace Core joint venture — owner of the largest portfolio of stabilised modern logistics assets in India — and also invested in IndoSpace Logistics Parks III.
ILP IV will add up to 30 million square feet (2.8 million square metres) to the portfolio of IndoSpace, whose backers include Asian industrial giant GLP, after the first three development funds accounted for a combined 56 million square feet.
“Over the past few years, we have made numerous investments in India’s industrial space, where we see strong demand as the manufacturing sector continues to grow and the e-commerce sector matures,” said Hari Krishna V, managing director and head of India real estate at CPPIB. “We are pleased to be working with our longstanding partner IndoSpace to further capitalise on opportunities in this space and believe this investment will deliver strong risk-adjusted returns for CPP contributors and beneficiaries.”
Billion-Dollar Partnership
ILP IV will focus on India’s largest logistics markets: Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune. Following the latest investment, the partnership between IndoSpace and CPPIB will exceed $1 billion in assets, the parties said.
Hari Krishna V of CPPIB
IndoSpace in December 2018 announced the closing of its $1.2 billion ILP III, just three months after establishing a strategic joint venture with GLP to mark the Singapore-headquartered firm’s entry into India.
The IndoSpace Core JV had a mandate to acquire 13 industrial and logistics parks totalling 14 million square feet in Chennai, Pune, Mumbai, Delhi and Bangalore, with an option to buy an additional 11 million square feet from IndoSpace funds’ development pipeline.
Brian Oravec, managing partner and CEO of IndoSpace Capital Asia, said ILP IV would allow the platform to continue expanding its national network to better serve customers.
“Industrial and logistics infrastructure is a key enabler of economic growth,” Oravec said. “To meet India’s aim of becoming a $5 trillion economy by 2025, IndoSpace is excited to continue to be one of India’s key infrastructure creators.”
Indian Sheds Draw Attention
CPPIB, which manages C$529 billion ($396.4 billion) in assets, is the latest Canadian pension fund to boost its investment in India’s logistics sector. Montreal-based Ivanhoe Cambridge joined forces with US private equity major Bain Capital last year to set up a $1 billion industrial partnership with development giant Lodha.
The Lodha partnership is developing a next-generation green digital infrastructure platform of logistics and light industrial parks, as well as in-city fulfilment centres, with an aim to create 30 million square feet of operating assets to serve India’s digital economy.
Last November, Singapore sovereign fund GIC and warehouse heavyweight ESR announced the formation of a $600 million joint venture to acquire income-producing core industrial and logistics assets in India. GIC and ESR hold respective stakes of 80 and 20 percent in the strategic partnership.
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